Installing solar panels on your home can feel like putting on a jetpack: the idea seems cool, but actually doing it is a little daunting.
Totally understandable. It’s a big decision, and there are a lot of factors to consider before you’re ready to dip your feet into the solar-energy waters. To keep things simple, we’re only going to talk about one aspect of solar energy right now: how it can save you money on your taxes.
Here are four renewable energy tax incentives to think about:
1. The Federal Investment Tax Credit. This federal tax credit applies to 30 percent of solar panel building and installation costs and doesn’t have a limit, which is sweet! Bonus: This credit can also be applied to geothermal heat pumps. For more details, visit the Energy Star website.
2. State Tax Credits. Each state has different programs, but some of them can even exceed the federal credit savings. For example, North Carolina has a tax credit that can be applied to 35 percent of solar panel building and installation costs. To check the credits available in your state, use this handy map from US Department of Energy.
3. Utility Company Rebates. Many utility companies offer rebates and renewable energy credits to homeowners with solar panels. For example, in Massachusetts (and many other states) you can actually sell your energy back to utility companies in exchange for solar renewable energy credits (SREC).
4. Local municipality incentives. Since these incentives take place at the city or township level, there are a TON of them, and they can vary greatly. This also makes them easy to miss, so be sure to check with your local municipality and see what’s available.
If you want to put some actual numbers on these credits, Kiwi Solar does a great job of breaking down the potential savings in a few different cities – they show things like the monthly revenue you’ll generate, first year savings and the amount of time before you’ll see a return. Location can really affect ROI, which you can see by checking out the different numbers for places like Chicago, San Francisco and Long Island.
If this info has piqued your interest in solar energy, use these tools to figure out how much money you can save in your area. We’d love to hear what you find!